Income Ideas: 8 Dividend Champions With Healthy Levered Free Cash Flows

When searching for companies that pay reliable dividends, it’s important to consider the free cash flow that the company is generating – after all, dividends are paid from free cash flow.On that note, we wanted to see which historical dividend champions (i.e. those that have increased their dividend for 25+ consecutive years) are best positioned today, by looking at levered free cash flow as a percentage of market cap. click for expanded images Levered free cash flow is the free cash flow available after paying interest to bondholders and re-paying any principal as it comes due. From this cash flow, the Board can decide to pay all or some in dividends to shareholders, or re-invest the money back into the firm to support growth.We ultimately found 8 companies with levered FCF above 10% of market cap, indicating significant flexibility in paying dividends (and potentially undervalued levels). These companies... Read more